Posts Tagged ‘Orange County Bankruptcy Law’

You wouldn’t encourage your 4-year-old to cut his own hair, go to a museum full of cut-rate artwork, perform your own root canal or spend your fancy Friday evening out at a dodgy restaurant. Apply that same thought process to your financial future. Choose the best, the most experienced bankruptcy lawyer, not the one with wet ink on his bar card. Bankruptcy is something you want done right because it won’t grow out like a bad haircut. Doan Law Firm has over 200 years of combined bankruptcy experience. We’re the best in the business and we’re ready to help you.

We are often asked if a husband or wife can file bankruptcy separately. The short answer is yes, the longer answer lies in what you hope to accomplish.

By way of background, each debt is the responsibility of the person that took on the debt. For most married couples, that is both the husband and wife. If only one spouse has responsibility for a debt discharged in bankruptcy, responsibility for the debt remains with the other spouse; the entire debt, not half of it. For this reason, it’s generally best to have both spouses file so both can receive a fresh start.

To add a layer of complexity, if all the debt lies with only one spouse, California’s community property laws come into play. Assets acquired during marriage are generally community property (to oversimplify a complicated family law concept). As a result, a creditor can collect a judgment against a community property asset like a bank account or a piece of property. This is a more sophisticated level of collection, but depending on the creditor and/or the amount of the debt it does happen.

- You don’t have an emergency fund. Without an emergency fund, you’re living paycheck to paycheck and are vulnerable to any setback, small or large, like a cut-back in hours, furlough days, an across the board pay cut or a job loss. All of these events are out of your control and any one of them will throw a major wrench into your financial picture and can send you seeking the shelter of the bankruptcy court.

- You’ve maxed out your credit cards or are charging more than you can pay off each month. Maxing you’re your credit cards means that you are using them for living expenses. Charging more than you can pay off means you’re going backwards, losing traction, and it’s just a matter of time until you’re maxed out. Keep in mind credit cards can do pretty much anything they want under their cardholder agreements including unilaterally cutting off credit and raising interest rates, so a card that’s not maxed out today could certainly be tomorrow.

- You pay the minimum balance on your credit cards. When you can pay the minimum balance on your credit cards you feel ok, even as you’re serving up another helping of Top Roman. You’re paying your bills, but the truth is you are one interest rate hike away from total annihilation and the credit cards frankly don’t care. When you call to tell them the hike from 9 to 32% interest makes you unable to make the minimum payment even after you take a paper route before work, they will be less than sympathetic.

- Your business has failed. Most bankruptcies can be traced back to 1 of 3 events, a failed business, medical crisis or family crisis. Some have experienced all 3. If you closed a business, you might be surprised to find how many of the businesses’ obligations you took on personally, even if you had a corporation. Your closed business may haunt you for years as your business landlord, suppliers, partners and creditors show up wanting payment, plus interest and fees.

- You have no health insurance or inadequate coverage. As we noted above, bankruptcies can be traced back to 1 of 3 events, a failed business, medical crisis or family crisis. Having no health insurance or inadequate coverage is a big warning sign because one ambulance ride or one hospital admission can change your entire financial world. If you think health insurance is expensive, take a look at health care itself; absolutely prohibitive.

If any of these warning signs above exist for you, please call Doan Law Firm for a free, no obligation consultation to see how bankruptcy can help alleviate financial stress and give you a fresh start.

I sit across from a lot of people that never expected to be in my Orange County bankruptcy lawyer office discussing financial hardship. The great majority of my clients enjoyed gold star credit and stellar earning power not very long ago. The downward slide of the economy has affected every segment of society. Crippling credit card debt, upside down home mortgages and wage garnishments are commonplace and affect even the previously immune.

Bankruptcy is a financial do-over. Professional tennis players get 2 chances to make the serve. There are 3 strikes before a batter is out and cries of “do-ver” permeate every playground from handball to hopscotch. There’s no shame in hitting the reset button and starting again. In fact, it’s often the wisest thing you can do and the only way to really move forward. In the do-over you have all the collected wisdom of the first go-round at your disposal and that’s exactly the design of bankruptcy.

In the context of a Los Angeles Chapter 13 bankruptcy, if the State or IRS voluntarily submits a proof of claim for tax liability to the court, the claim will become part of your bankruptcy. If your bankruptcy is paying a percentage to unsecured creditors (like credit cards), then it would be beneficial to pay the claim through your bankruptcy plan as it would not increase your overall Chapter 13 plan payment amount. A portion of each payment is directed towards the taxes and by the end of the plan the taxes are paid in full.

It is unclear that when applying for payment arrangement with the State and/or IRS whether they will choose to set up a separate repayment plan or submit a bankruptcy proof of claim. Most likely they will default towards setting up a separate repayment plan.

As always, please check with your attorney and let them know what kind of payment arrangement the IRS and State is proposing before making any payments. We will explore your option of claiming the current tax liability in your existing Chapter 13 bankruptcy plan once we know the IRS and/or State’s course of action.

The information on this bankruptcy attorney/law firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, e-mails or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and reciept or viewing of this information does no constitute, an attorney-client relationship.

doanlaw.net is an informational website sponsored by Brothers Law Group LLP (dba Doan Law Group), Law Offices of Gregory J. Doan Esq APC, SN Doan APC, Michael G. Doan APC, and Shawn A. Doan APC. Each of the foregoing entities individually owns and operates its respective law practice. Each entity has been designated by the Federal Government as a qualified debt relief agency that helps folks file bankruptcy under the bankruptcy code.
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